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PERA Launched at the BSP


The Personal Equity Retirement Account (PERA) was launched at the Main Office of the Bangko Sentral ng Pilipinas (BSP) on 16 December, culminating several years of preparations among government agencies and market players.

As a voluntary retirement account, PERA provides an organizing framework to help Filipinos 18 years old and above prepare for their eventual retirement. The PERA law, crafted in 2008 as Republic Act 9505, provides tax benefits while instilling the saving discipline of making annual contributions to their own account.

“We have been working with various government agencies and we are happy to see PERA come into fruition. PERA is certainly a major step towards improving the financial well-being of Filipinos,” according to BSP Governor Amando M. Tetangco Jr.

Unlike existing national or corporate pension schemes, PERA does not require a deduction from one’s salary to accumulate funds. Instead, PERA relies on an individual’s decision to invest up to Php100,000 annually to prepare for retirement. The PERA law allows individuals to open up to five PERA accounts and these can be invested in specific PERA-accredited product lines. Overseas Filipino Workers are provided the additional benefit of being able to invest up to Php200,000 annually which is twice the normal limit.

“Since we have a very young population and typically strong family ties, we tend to overlook preparing for our own retirement. PERA addresses this by providing all the essential elements – from governance to products to financial literacy to incentives – so that we can properly get started,” Governor Tetangco added.

Individuals who like to open their PERA will do so thru accredited PERA administrators. Upon their own choice, they can engage a PERA investment manager who can help them with investment advise. The BSP and the BIR had so far accredited Banco de Oro and Bank of the Philippine Islands as PERA institutional administrators, in addition to the 61 professionals who have passed the individual PERA accreditation examination.

PERA law proponent and former Senator Edgardo J. Angara took part in the ceremonial switch on of the PERA system. Other legislators from the Senate and House of Representatives were also in attendance.

Joining them are top officials from the BSP, Department of Finance, Securities and Exchange Commission, Bureau of Internal Revenue, and Insurance Commission. Also on hand were representatives from the Asian Development Bank and the Japan Fund for Poverty Reduction, which provided a technical grant in support of PERA. Members of the banking community likewise graced the occasion.

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